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I first recommended McDonald's Corp. (NYSE: MCD)to Money Morning readers on Feb. 23, 2009. A few weeks later the stock bottomed out at $50.44. It then took the turn that we expected and went on to rally some 28%, achieving a 52-week high of $64.78 by the end of the year. The stock is now consolidating at these levels, and, from a technical standpoint it appears to be forming a cup-and-handle pattern.

This is important because this type of pattern often leads to explosive breakouts once the resistance level is breached. And while we wait for this to occur, we have the luxury of sitting on a 3.23% dividend yield, which is very safe given McDonald's very solid balance sheet.

I am confident that the only downside scenario to this investment would be to see the stock move within its well-established trading range for a little while longer. In times of economic and political uncertainty, this stock is a desirable one to hold as a core portfolio position.

The key question now is a simple one: Do the "fundamentals" of the company warrant an appreciation from these levels. And the resounding answer is "yes."

Let me tell you why.

McDonald's stock has rallied only 28%, while the company's quarterly earnings have grown 80% year-over-year. Meanwhile, the industry's earnings have grown just north of 30% during the period. For that reason alone, McDonald's stock warrants a premium over the industry. However, the market has not yet recognized this.

At a historically low Price/Earnings (P/E) ratio of only 16 – compared to an industry average of more than 18 – McDonald's shares are a no-brainer for the hedge fund industry: Buy McDonald's and short the iindustry against it, until these metrics make sense. From the standpoint of a long-term investor, it is just a matter of time until institutional investors recognize how undervalued McDonald's stock really is.

And as a result of strong earnings growth, the company's valuation metrics (which inexplicably remain well below the industry average), have become even more attractive. And this trend continues day to day.

You get the gist: With sales and earnings growing like clockwork, the golden arches' stock becomes a more compelling investment proposition every day.

So what is underneath these tremendous 76% gross margins, which eclipse not only the 30% industry average, but even the margins of most software companies? And what's driving the resulting 30% return on equity, which dwarfs the 1% industry average?

The bottom line here: With its superior business model, strong execution and a strong global brand, McDonald's has greatly improved its overall brand and restaurant configuration, and expanded its product offerings with great success. From the McCafe to Angus burgers, new snacks and other innovative products, the largest restaurant chain in the world keeps staying ahead.

The long established presence of the franchise, which gives it huge economies of scale, provides a competitive advantage that will be incredibly difficult for competitors to overcome. This has been true in the United States, as well as in Europe and emerging economies, where McDonald's just keeps pulling away. And while the recent dollar rally could dent overseas sales, it also will make commodity prices easier to digest, thereby expanding margins.

The bottom line: McDonalds is executing superbly both domestically and abroad, and the company has incredible margins. We might have to wait a bit longer before we see the stock break out of its current range,but this is a very favorable risk-reward proposition in the current environment. Plus we are cashing in on a juicy dividend while we wait.

So, if you don't yet have a position in McDonald's, this is the time to start building one. If you see a 10% dip in the stock, you should maximize the allocation, and wait for a breakout sometime this year. Most analysts do not understand the power of foreign markets, where McDonald's is eating everybody's lunch. So once you see it breaking the current range to the upside, hang onto your hat and enjoy the ride.

Recommendation: Start buying McDonald's Corp. (NYSE: MCD) stock at market (**). Maximize your allocation if you see a drop of 10% in the price of the stock. Buy your entire allocation within three months.

[Editor's Note: Success as an investor isn't based on what's hot today.

It's really based on the anticipation of what will be hot tomorrow.

Gold is one of the hot commodities of today. But the shrewdest investors will look toward the horizon, and try to project just what the commodity profit plays of the future will be.

If you need help, just ask Money Morning's Horacio Marquez.

As worries about oil escalate – whether those worries are about future supplies, future prices or global-warming – more and more muscle is being placed behind alternative power technologies. That's especially true in the hybrid vehicle market, where a specific technology has emerged as the clear leader.

The technology is lithium-based rechargeable batteries, and its emergence is sending lithium demand skyrocketing.

The profit potential of this market is stunning – but only for investors who can figure out the right way to play it.

Here's the thing: Marquez – a Money Morning contributing editor who also edits the Money Map VIP Trader – has uncovered the lithium-tech leader. This company is a global player with a solid market cap and is well known within the hybrid industry. But surprisingly few investors know about the company, or have ever even heard its name.

To learn more about this company – to get in ahead of the masses – and to find out more about Marquez's Money Map VIP Trader, please click here.]

i suggest that lithium is overblown. the primary reason is that our so-called future elec cars will not have lithium batteries. They will have silver oxide batteries. Lithium is too expensive. It does not hold a charge well. Wears out too soon. If you were silly enuf to buy a chev Volt check the stats on the battery and the price of a new one. You will get the point real soon!

hello,sam is right we are a decade away from creating efficient electric automobiles ,natural gas powered automobiles will be the preferred mode and the most economical as the us is natural gas rich. greetings,MICHAEL FLAYAC

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